From Marhard where Innovation, money and power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
I'm Carolin Hyde and Bloomberg's word lad Quarters in New York, and I'm Ed Lovelow in San Francisco.
This is Bloomberg Technology.
Ed caution consumes investors as were a torrent of tech earnings.
This week, we discuss what to watch.
But artificial intelligence momentum. We speak to the CEO of Runway on generative AI powered video and we're joined by the executive leading fidelities charge into AI and machine learning.
Meanwhile, legal headaches to blue check chaos. What on earth is going on at Twitter? The latest is all coming up.
It is a big week where earnings are in focus. You look at this sort of long list of megacat names that are coming. We start with Microsoft, then Alphabet, the parent company of Google Meta, and then we work through to May fourth in a couple of weeks time or next week. For Apple. Things are getting very serious because across the S and P five hundred information technology subsector, we expect a pretty big drop when it comes to earning's character.
Yeah, we're expecting the biggest drop in tech profits since two thousand and nine. Let's dig in to the key company's got to keep an eye on none of them and Mart Mahiney you know him, of course, senior managing director of Internet Research over at Evercore ISI and we wait with bated breath to the likes of Alphabet, some of the big heavyweights that really shine and light on how much companies are willing to spend on advertising and drive these sorts of companies forward.
Mark, That's right, Caroline, So yeah, we're going to get a lot of I think there are three things we want to alter that it and all the noise we're going to get the signal we're going to get this week. Let's try to focus on three things. What are these companies telling us about the state of the economy. Is our advertising retail trends, cloud enterprise spend trends. Are they still deteriorating or improving from where we were in the
December quarter? Our best guess is that trends are stabilizing to softening, not recovering yet. The second thing is costs. That's the new sheriff in town, if you will. All of these companies across tech have announced some sort of riffs reduction in forces over the last three six nine months. I mean, it's a dramatic change in the mentality of Silicon Valley and of tech broadly. So is there more to come? And what does it actually mean in terms
of the bottom line? How successful are these companies defending their free cash flow and earnings? And then the third thing is on the positive side, is AI generative AI. You already teased it out a little bit, and I imagine that every tech company is going to mention AI and somebody should start a counter right now. How many times AI is mentioned in the in the earnings transcripts over the next of course, of the next couple of weeks.
But it's going to be high.
But for a reason too, we're at a bit of a tipping point because for a lot of reasons, but you know, chat GPT really brought AI home to most people about what the power is of these models even though they've been deployed for a while. But the increase in compute capacity really allows kind of a step level increase in the applications to the deployments of AI. So talk about it. We want these companies to talk about how well positioned they are and what their deployment ideas are.
Mark, let's go back to that sheriff in town being cost control. You know, probably the one point of commonality between those names is that they have done layoffs and other cost reduction action and how it shows up. I find Meta to be really interesting in that respect because the top line growth might not be there, but I think we're expecting a sequential improvement in margins, right because of the actions that they've taken.
I think that's right.
I just think of these companies, probably the one that's been most aggressive in taking out costs so far, maybe surprisingly it is Meta, and I think these other companies, I think the market. I think investors want Google to do more with their cost structure, that's probably, and then I think market once and investors want Amazon to do more too. I don't know about Microsoft. Investors may be comfortable with where they are now, but yeah, I think at the whole, investors kind.
Of want a little bit more.
Look, we overbuilt, we over hired because we overextrapolated from COVID demand trends, but also because we're going into a softening demand environment. You know, households are going to have to tighten our belts and solo companies. So I think there's gonna be an expectation or at least a hope. This question is whether it's going to be realized that we're going to hear more on the cost front from companies.
I think we will from Meta, I'm not sure we will from Google, and I think we will from Amazon, but you know, it's hard to know.
The three big beasts that you analyze Mark Amazon also will shine a light, as you said so rightly, on how willing companies are to invest in things like cloud. At the moment, AWS a big profit juggernaut for them, but also for alphabet who are hoping to break even in some way on that. What do you expect for how much companies are showing resilience and needing compute power right now?
Well, we're decelerating. I think cloud demand is going down. It shot up during part of the COVID crisis. It's been a super hot, high priority level area for enterprise spend for the better part of five, six, seven years, but it's slowed down and we're through what we're going through what's called an optimization cycle, where companies are going to you know, when the renewals are coming up, they're demanding better, a bigger discounts, or more capacity for the
same price. That's clearly happening in the market. That means that these revenue growth rates that Microsoft is going to report with a zer, a, Google Cloud, and AWS are going to report, they're all going to show a slow down. And the question we have is just how low will it go? And I think we hope that the trough is kind of the June quarter, and we think with Amazon with AWS you're going to have like a single digit percent
growth and AWS revenue. I mean, that's kind of shocking if you go back two years, nobody would have expected that to happen, But that's probably what's going to happen. And then the question is how quickly does it base from there and start reaccelerating. We think it will base, We think it will reaccelerate. We just don't really know just how quickly it will. So that's that's going to be an overhang on the stock mark.
If we do get some upside surprise across this kind of pretty broad range of names, where do you think it will be.
I think it's probably going to come on the margin side. Ed I think it's probably going to come on the cost side, because that's what these companies can control. It can't do much about demand trends in a softening macro environment. So I'd be really surprised if we had positive, you know, material upwards revisions on cloud enterprise spend, or on retail spend or on advertising spend. I mean, I hope we get them, but as a bull on these stocks, but I don't.
I think that's.
Highly highly unlikely and what we should so I think there'll be positive news on the margins. We should all be just watching out for the chance that if we go into a hard landing in the second half of this year. I don't think that's modeled in. It may be priced in, but I don't think it's modeled into these companies. So that's what we're you know, Like I do worry like fund valuation wise, I think there's upside to be stock because they were so de risk last year.
But estimates wise, I think the first half the year estimates are fine, a little bit of an upwards bias because of cost cutting, But I just worry about the demand tens if we have a hard landing estimates may need to come down in the back half of the year, So I don't know if that's more cautious than you wanted to hear it. That's kind of how we come out.
And what's interesting about timing this year for this quarter. It used to be that Snap was the bell weather for where we would expect Alphabet and Meta to go, but they're actually behind those two ones in terms of timing this year.
Yeah, you're right, we showed the calendar earlier. Mark. It's just the cadence of the week gets bigger and bigger and bigger. But we don't have an early sense apart from Tesla that's reported on broadly where we sit in this market.
You're right, Carolina, Then you're right, and it's odd the way you set it up. Caroline, you're right that the market took Snap as a bell weather, but come on, it's tiny compared to these other companies, and they haven't executed nearly as well, so they've really been a false false indicator most quarters, I would argue, So I think it's better for the market that they report later because it's just noise that comes out of them. You and
I don't mean I don't mean that disrespectfully. I just think that they're less of a read through into the larger and larger players. That's what I really meant to say in a respectful way. Whereas Google is going to give you a really good view on what's happening to overall advertising trends. Google is GDP advertising, so and I think they're going to talk about trends that are softening, not deterior and dramatically, but are modestly deteriorating. And I
think we should be prepared for that. I think it's going to be a really reasonable read through, certainly sizable. It's the single largest advertising data point you can get worldwide. Pay attention to Google.
Mamahini well said, and pay attention to all of those AI headlines that come out of them as well. Av Aquo II, we thank you as always for joining.
Us a ed.
Yeah.
Look, layoffs were a common theme of that conversation. Let's take a look at Disney, which began its second round of job cuts today, part of its broader push to eliminate about seven thousand jobs this year. The company says that by Thursday, around four four thousand jobs will have been cut. The cut stretch from Disney's headquarters in Burbank, California to the ESPN Sports network over in Connecticut. Now coming up, Bitcoin hit new records after each of its
previous harvings. Now cryptoanalysts are projecting for a new high when the process takes place next year. We have more and how this will push the price of the digital token quick check and the shares of First Republic higher seven percent due out of earnings after the bell later today, have really keen eye on deposit flows still going the health of that bank long term, bringing the details.
This is bloombow.
So crypto taking a bit of a breathe over the last few trading days, but analysts through actually saying Bitcoin in particular, it's rebound, just the start of the rally that will take the coin past fifty thousand dollars next year, all because of what is the process known as halving, that's basically curbing the amount of tokens that miners receive as a reward for their work. Mike mccloin seeing in
macro strutches and bringing back intelligence joins us. Now with more and this so called harving, we're anticipating what happens in about April of next year.
Well, Hi, Caroline, it makes me put on my trader's hat versus my investor's hat. The having, i think is the key part of bitcoin's definable diminishing supply, which is unique to all common is the theater is kind of like that, just less more difficult to measure. But with increasing the demand and adoption of price must up over
time that it's a known known. The thing I'm worried about right now is this bigger unknown of the world tilting towards the recession, risk assets kind of tilting downward, and the FED still tightening. In bitcoin and in cryptos
among the riskiest of acts. So I'm worried that we're more likely to have peaked around thirty have some pressure for a while, particularly if we see more in the screen we're seeing today with the stock market going lower and NASDA kind trickling down below that thirteen thousand level.
Mike, let's go back to basics a little bit. A harving or harthening as it's otherwise known, reducing the amount of tokens that bitcoin minors get as a reward for their work. What is the link between that activity and the anticipation of the price of bitcoin going higher. What are the mechanics behind that.
So right now the most you can we can produce on a daily basis of bitcoin mine is nine hundred coins a day. Before that was eighteen hundred before the last having, So you get the next having that's going to cut it back to four hundred and fifty coins a day. It's by code, and then four years from now it's going to do it again. That's just the beauty of the code. It has to go down the supply decline.
So right now the total supply is running around two percent, so right around the historical measure of goal. A year from now it's going to drop below one percent because it's just definable diminishing. And that's the beauty of it. All those miners are fighting for more and more. But it's a unique thing about what bitcoin does. No other commodity does that. You can say prices go up, supply comes on tip. Particularly with gold it does too, but
most notably learned that when crude all last year. But what's happening now is people are anticipating now it's going to just do what it did in the past. And I think the thing that's different this time, ed is bitcoin was born out of the last great financial crisis
in that recession. I think this one's going to define it, but it's going to be its first recession, and I think it's the first time we might see that the S and B five hundred drop more than twenty percent into a recession, which should pull all risk acids lower.
So I think i'll end with this one thing you saw today was a little bit off topic, but similar as record shorts and ten year thirty year in bond futures, might be indicative of gold continued toll performing, Bitcoin being pushed a little to the waistside.
All right, Mike mcglom Bloomberg Intelligence on a roll out of Miami. Thank you. Meanwhile, Caroline, don't know if you saw this one. Franklin Templeton says it's money market fund used to record share ownership on a blockchain, is seeing inflows specifically from crypto related firms. The fund's total assets increased to around two hundred and seventy million dollars. This is a fund that invests in US government securities, does not hold crypto assets, but it's who's putting the money in.
Yeah, because remember a lot of at the moment, these overall crypto investors or crypto related companies, they've just lost a load of their financial infrastructure with some of the bank's silver gate. We think, of course Signature Bank coming out of the market. They want safer places to put their money. Of course, you kind of have to be banked to get into a money market fund, even if
it's Franklin Templeton. But I suppose it is no surprise that if you're going to look for a money market fund to gain you exposure, safe exposure overall, you're likely to go to one that's at least in some way in your line of sight and liking. And of course the Franklin on shae US government money funds they're going to like that. There's sort of play there, isn't there, And at the moment it's off likely to be on chain without Benji coin.
We saw the vcs do it, and now we're seeing the industry itself do it with their own money. Let's continue talking with the crypto market. Sunny Singers here with more insights. The CEO of CS Labs twenty one in stealth mode, but also of course a well known person in this industry. Let's go straight actually to the harving or the harvining. What do you make of that?
Yeah, it happens everything years.
You're a believer in the logic behind it.
Yes, it makes sure like central governments can keep producing new currency, which creates inflation. Bitcoin was created the other way to reduce the supply, which makes it more deflation area. So it's a great mechanism they built into the system, and it happens every four years, and it's scheduled to happen next April twenty seventh, round rough with that date, and so right around a year from now, and you're gonna start seeing a lot of media frenzy start happening.
Six months to you know, rout and that should start happening, and then you start seeing the price run up a little bit.
Look, it's funny to overall think about how much we've seen this torrid time within crypto, whether it's actually the likes of Bitcoin eighth sort of taking up a lot of the oxygen in the room when it comes to allocation at the moment, or at least.
Where the rallies have been.
Then there's also the question we were just talking about the fact that a lot of crypto players find themselves without the banking infrastructure that were used to the signatures, the silver banks or the overall silver gates as well.
How difficult is it in the crypto space for you?
It's very bad.
So my company we just raised a four million dollar seed around. We did it in forty five days, which is great from an all starting of crypto investors as all autritional investors, But the mood has definitely changed. The banking regulations have become increasingly hard. Getting banks is increasingly hard. Everything that could go wrong has gone wrong for the
crypto industry. And yet the price of bitcoin has rallied from sixteen thousand to almost thirty thousand in the last six months, which is pretty remarkable, and I wouldn't be surprised if bitcoin hits forty thousand this year.
Can I just jump in on that seed stage? Just broadly speaking, how difficult was that following the collapse of Silicon Valley Bank? For how long you would negotiate around But you're basically taking a crypto proposition to investors who are a bit more cautious than perhaps they previously were in that industry.
Yes, it was much harder and we wanted to get a mix of crypto investors as well as silicon value investors.
And the silicon value investors.
Might have loved the idea, but they're no longer doing crypto investing anymore. A while of teams said they're now doing AI and pivot, so it's much more difficult that way, and they would rarely to wire our money the day before SVB had the issues, and we're going to SVB two as we did away that three weeks too. So again, everything that could go wrong has gone wrong in the crypto space for the last year, I would.
Say, and that's not even talking about some of the overall regulatory headwinds that still everyone is very worried about when it comes to how people are going to analyze the SEC is going to look.
At some of these crypto assets.
All these headlines you see Gemini thinking of a non US based derivative platform. We know that other key players are looking at licenses, crypto licensings in Bermuda. How tempting is it to take whatever you're building out of the United States.
Yeah, and again companies that coin based Gemini, my previous company, bit pay. We try to play by the rules. Work with the SEC. We all got in New York bit licenses. We're trying to do it the right way. Fighting the SEC is now really getting a little harder to work with, and they keep changing their mind on things and becoming like coin based of Gema. It's trying to keep growing during Crypto Winner, it's hard for them to get full clarity on what to do.
That's why they're looking offshore.
And again ftxus FTX, which went out of business, was created because it compan called bit mechs random issues. And now with FTX gone, there's really a void in the international trading markets that's going to buyans instead, and companies like Gemini and coinbas see a big opportunity if they can get this derivers market and things like that that Bias has been focusing on.
All right, Thanks to Sonny Saying CEO of cs Labs twenty one, which I hope to hit more about. Twitter's legal battles over its mass layoffs. Last Full continue to grow, with two more formal workers filing class action complaints at about two thousand Index employees pursuing claims in individual arbitration. Let's bring in Bloomberg. Sarah Fryar for more two thousand, making claims. It's quite a big chunk of the workforce that was laid off.
And it's all in individual arbitration and mass arbitration, which often when companies put the arbitration clauses into contracts to expect that they'll be able to get things done quietly behind the scenes. In this case, I don't think that's going to work. I think it's going to become a very arduous and expensive process for Twitter.
Meanwhile, there's been several people completely well many people completely baffled by what's happening at Twitter in general, particularly around who's got those blue check.
Marks who doesn't. It feels as though there's a lot of chaos there at the moment.
I just want to listen into what Ron Reynolds had to say last week about the service to take a listen.
Sarah, I don't know. I mean, I see they all have sort of different footprints. I mean, Twitter has is now and has always been a piping high dumpster fire of trash, and it is it can be a very difficult place, but it's also a place that there can also be incredible good.
When you have words to say like that, are we unsurprised that with twenty one million followers, his Blue Legacy check mark isn't being paid by Ela Musk.
I think that we're actually seeing the check mark return to a lot of accounts in particular that have been critical of Musk is almost applying that brand to them as a punishment, which seems like a strange a strange reward slash punishment. If you want people to buy a blue check, using it against your enemies is not the strategy I would pick, but hey, Musk has he works
in mysterious ways. I think we're also seeing the check reappear among the accounts of you know, rather popular accounts with more than a million followers, including some accounts of people who don't exist or who have since died from before the checks were rolled out. So it is all getting a whole lot more confusing, And I think that it just means the Twitter Blue experiment nobody knows what it's for. Nobody knows all.
Right, Bloomberg Surah for I thank you. Cara would point out in Ryan Reynolds's case, in particular, he is using Twitter right. Think about the reaction video he shared film by Paul Rudd after his football team Rexham got promoted.
Millions of people saw that particular clips, several clips.
What a story They've got to make another documentary out of it.
Ed.
Yeah, and by the way, my mum was born in Wrexham, so I was cheering from AFAR.
Welcome back to bloombag Technology. I'm Carolin Hide in New York.
And Imed Ludlow in San Francisco. Carrige. We get a quick check on the markets and where we're training in the technology sector, and that's that one hundred softer by about seven tens percent. Tesla kind of a big drag on that index from a points perspective. Underperformance as well in the chip space semiconductors and the socks off by nine tens percent short end of the curve. That is interesting.
You see the two year off by about three basis points four point one four percent, and as we said, we kind of cooled it on Bitcoin twenty seven three hundred dollars or so per token. There's a few specific movers that we're looking at in the markets as well when it comes to big tech names, actually tech names large and small. Mister director, if you change up the board Tesla, as I said to the downside, a pretty big drag. Microsoft also markedly lower off by two percent
ahead of earnings coming this week. Amazon also softer C three AI, an AI name that has been downgraded, not for anything reasons to do with artificial intelligence, Caro, simply to do with macro and fundamentals. And you wonder now how much this market is getting a bit more realistic, some of the momentum on the publicly traded AI names at least kind of being taken out. Should we move on.
Here's what some of our guests on the show have had to say about the rise of generative AI in that space, both but for the sort of investing standpoint, but also let's have a little thing about research too. Have a listen.
Some of the best opportunities are are sitting right in front of us.
AI I believe will be the third largest compute revolution that we've seen in our generation.
So we think the biggest opportunity and the safest place to deploy these type of technology is inside the enterprise itself.
We'll see more of that AI to go into traditional industries and helping them move faster and be more efficient.
AI is global, it's not something local. It's not a fan. It's going to be here and it is affecting all of us.
This space is emerging so fast.
Frankly, it's very hard at track.
Even from an investment perspective.
There's never like one very obvious clear answer when you're getting into the weeds of how this technology can affect people. I'm a huge fan of making sure that the government authorities work closely with the industry.
Well, we've got yet more insight, this time from a heavy backe see backed player in the space already making things, creating things in the real world.
Chris valence Uler is with our.
CEO of the applied AI research company Runway. Basically, you're all about human creativity, you're about films. We've already seen what your own AI generalor AI being used within everything everywhere, all at once.
How is it being used in a way that that surprises.
You many ways.
We started to see things that we're just literally impossible to do for now being possible with these technologies. I think we're still very early to understand the full creative
potential of everything that will come. But yeah, you have thoughts like everything about all once using Runway to added some scenes in there, you have musicians and artists taking like really the technology to the next level, which we think it's really the right thing to do, which is start experimenting and exploring more with these capacities.
You have.
Of course all of this excitement euphoria, there's also a lot of nerves, particularly around people who worry that their own are their own imaging is being used to train Aiyes on, how are you squaring that circle?
Because it's a difficult one to navigate.
Yeah, I know, and we've always thought about that in a very particular, interesting different way. I come from on our distant background, and so I have deep empathy for those arties and those creatives who are asking themselves what's going to happen next with this technology?
I think, I think to remind ourselves is that we're.
Still very early, and what we need to do is open the conversation to have more people come in and understand how you're going to start leveraging this technology in your art practice. I think that for me is really important, and I'm something we practicing runway kind of like from the very beginning.
Chris, your Gentoo system is still on a witless basis, right, I know a lot of folks that I've spoken to about this way are keen to get access. But the reality is, you know, text to video it generates about three seconds, and I wondered how much you're emphasizing the kind of early stage that this is In three seconds. Not a lot of contents generate using the tool.
I agree three seconds is not enough.
We already have fifteen second like long support Engen, you're working towards including and adding more to that. I think the reason we released with three seconds is we have to make sure that more people can get their hands on the research, on the product, on this new way of creating.
Content and really have thousands of people using it, and so the amount of.
Feedback we've gotten to improve the quality of the model the experience as well. I think text to videos one of many modes of using Gen two actually has eight different modes. Today release the mobile app for the first time ever, you can try Gen one actually on your iPhone, and so there's so many things yet to be explored and discovered here that for us really just making sure that we could put it in the hands of more creatives out there.
I was listening to Noam Shazir, the CEO of character Ai on the No Prize podcast the other day, and he faces a similar debate, Right, how do you onboard users and grow the user base and then in the future monetize And I wonder how that equation looks for you as well, the focus on kind of making money or just grow the number of users and investing in the infrastructure needed to support it.
I think it's important that remember that we're very early on the journey of both value capture and one of the station industry wide, and so making sure that you work with as many people and as many companies as you can will help you on tab possible value captures.
I think overall, where we're starting to digest the initial stages of that and for us is really making sure that we're going to keep building the research and the foundational effort to build better models and more safe models every time.
Hey Caro, I think back to when Sonia Juang of Sequoia is on the show a Venture Capitalist explaining why she sees potential here, you know, think about one's ability to dream up anything and use the generative tool to just create your own video. That's where the vcs seemed to be wanting to put their money.
To augment humanity, not to come against it at the moment. But Chris, I turned to you and think about how enthusiastics certain vcs have been around you. I think a CO two Lux Capital for Lie's. You've got a lot of money come in your direction. Are you turning it away? Are you thinking about raising funds opportunistically?
So we started Runway like four or five years ago, I mean working on jogging models and creative tools for the last eight years or so. When we started, it was hard. Jenneyvi I wasn't really a thing, and people told us we were crazy, Like Jenndyvi, I was never going to be a thing.
Really, I did as little as four years.
Yeah, four years. I will be broiled at Chris. This is not a thing.
JENNEYV is not a market And so the one thing that I think has changed now is I don't have to convince more people that this is worth paying attention to. That's that's for sure. But we're very fortunate to be able to work with investors that believed in that very early on, where perhaps they're wandering as much proof points and it's a long term bad. But I go back to the mentioned before, it's still.
Very early, and a lot of one need to be built around.
The industry at large is still yet to be built, and so there's a lot of opportunities for more investors to invest in more kind of likes in you can't really speak about like fundraising, but I think the industry at large will will continue to grow very very.
Fast, all right, Chris Balezuela, see a runway. Good to see David Cumming on the show. Keep us updated. Now when this one physics teacher isn't in the middle of a physics lesson, he's in the middle of building one of the world's biggest free AI training data sets. His Bloomberg Zaggie Cantrell with.
More Luranza's time DAI one came out and I was instantly wow, Wow, this is so extremely powerful, Like now we can draw images from text and this will change everything. And I instantly understood that if this is like centralized to one, two or three companies, this will have really bad effects for society.
We've taught for months about the benefits and pitfalls of artificial intelligence, but what we talked a lot less about is that these AI products are built on decades of data from across the Internet. One data set, which has been used to train image generators Stable Diffusion and Google's Imagen is called.
Lion five B.
Lion five B was created by a team of hobbyists, including a high school student in London and a high school teacher in Hamburg. Lyon is built on open source data. It scrapes public images from across the web and anyone can see what's in it. Stability AI, the company behind Stable Diffusion, is now seeking a four billion dollar valuation thanks in a large part to the free data from Lyon.
I think it's really important for this technology, the models we train, the data sets we produce to stay openly accessible.
But after discovering that their work was used to train Stable Diffusion, artists are now suing Stability. Lyon is cited in these suits, but not as a defendant. It's still an open question if these artists work, or any images that are publicly available online a fair game for these data sets. An answer may come soon with the European Union's AI Act, a government's first ever serious effort to regulate our ti official intelligence.
If you want society to embrace technology and to trust technology, you need to have that social contract with society.
The generative AI boom has also generated calls to ensure that companies disclose what images train their machines. Models like Openaies, Daly Too, and chat GBT, for example, have not really shared any details about their databases. While such regulation could be a win for artists and creators, advocates for open source data sets believe over regulation will only benefit big tech in the long run.
If we try to slow things down and over regulate, there's a big danger that in the end a few big corporate players can afford to fulfill all formal requirements, and in the end this technology and all data that flows through it, will it be monopolized or at least highly centralized.
And I see this as the real danger.
As AI data sets and the rules around them are being developed in tandem, the question remains how closely should we regulate what goes into them?
That was the latest from Bloomberg Zaggie count out of Germany. Now, the CEO of NBC Universal is leaving after admitting to an inappropriate relationship with an employee. In a statement after an investigation, Jeff Shell said he deeply regrets the incident. He served as CEO since January twenty twenty and worked at NBC Universal parent Comcast for almost two decades. A replacement has not yet been announced.
Caroline and just sticking with media, just check out the market capitalization hit to Fox today. Seven hundred million dollars has been lost as it's down four percent.
Why but as parting ways with Taker, Carlson.
Seems to be the real catalyst of the news, it's most popular primetime host we know, also the source of repeated controversy over his statements and everything from election fairness to LGBTQ rights. We currently see also plenty more news coming from the medial world.
We're going to dig into that in a little bit. But meanwhile, coming up, we're going to dig in more to.
Artificial intelligence, of course, and its impact on wealth management. We're going to be joined by Sarah Hoffman, vice president of AI Machine Learning Research at Fidelity Investments.
That's next, listen Bloomberg.
Time now for the VC roundup. Aerodyne Group, a Malaysian drone services company, has picked City Group for a funding round ahead of its planned IPO. According to sources, the startup seeking to raise up to two hundred million dollars and aims to make its first close in midyear, ahead of an IPO in twenty twenty four or five. And Schroeder's a shareholder in the UK financial technology company Revolute, has cut the value of its stake by forty six percent.
This is the second right down to hit the company after the fintech's firms auditors raised questions on its twenty twenty one revenue.
Caroline and we're going to stick a bit on the world of fintech, but we're going to focus in on the impact of artificial intelligence on it because we've talked about perhaps how AI is affecting yours and my life in general generative AI, but what about wealth management in particular.
We've got a bit of an optimist in the house, Sarah Hoffman, and vice president of AI and Machine learning research over at Fidelity Investments, And really what takes us about some of your thoughts in AI and wealth management. There is the way in which you think chat, GBT or those sorts of large language models could assist with upgrading our approach to financial literacy.
How do you see that happening?
Yeah, so obviously the financial world has become so complicated and would really want more people to be able to access and under stand finances and one thing that I could see happening with generative AI. I mean, we've been talking about per personalization for so long, but this technology really takes personalization to the next level when it comes to any type of education, but specifically financial literacy, which
is so complicated. You can ask this technology, you know, explain this to me as though I'm a fourth grader, Or if you're somebody who's very into sports, you could say, explain this to me with a sports metaphor we can all really learn in our own way now, which is super powerful.
Yeah, I've already been doing it to explain it to my five year old I'm interested in those serah As to how much information you talk about personalization, how much are people willing to share their own financial information and asking for examples and advice?
Shall we say it by chat ChiPT? How right is that to do it at the moment as well?
Right now, I would not recommend using it for advice, but I do believe this could be great before you meet with a financial representative. So if a customer could really learn on their own before that meeting, and even the financial representative could use these tools before the meeting, I think we can have a much better, more informed discussion with better questions where even though I think the human is still essential, everybody's gaining and coming in a better place.
Sarah, I'm interested in you and what you're up to at Fidelity. Give me a typical day in the life of Sarah Hoffman working in the field of machine learning and AI.
But at Fidelity, I focus specifically on what's coming with technology over the next five years. Fidelity is a company that really wants to make sure we are ready for what's coming across our business units, and so at Fidelity we focus specifically on building the next generation digital platform. I'll also focusing on the human element of the industry, which we believe is very important, and so my role specifically is really making sure we are aware of the trends that are coming.
Would you say that you work closely more internally with your technology teams or how close are you also working with the investment teams to basically say, look, this is a tool that we could use and here's how we might potentially use it.
Yeah.
So I write research papers and give presentations and talks and have dialogue across the company across roles and for both of these types of roles.
And how much so is everybody chat GIPT to help write those research papers now.
Sarah, I've tried, I would right now. One of the main issues with tools like chat GPT is that they really don't have current information, so you can't really rely on it for if you're looking for trends or anything that's it doesn't understand or know about what's happening right now. But it's still useful for if you're trying to figure out a nice structure or even brainstorming. You know, how
can generative AI be useful in wealth management? It's a useful brainstorming tool, but because it doesn't know today, I wouldn't recommend it to trust it blindly. One nice thing I would add about using it for brainstorming is that today it could produce things that you cannot trust. And when it comes to brainstorming and trying to find a novel insight, it doesn't actually matter if you can't verify the results, as long as it helps you think more
creatively and think differently. So to me, brainstorming is actually a perfect use case for these tools.
Sarah.
It was interesting we just had Chris Valenzuela on who's the CEO of Runway, thinking about generative AI and the world of creation and particularly in images. But he said when four or five years ago he was speaking to vcs and they were like.
Generative AI is not a thing. It's not going to be thing.
Did you, as someone who has to look at what's the trend in four or five years, see this coming?
So I saw this coming.
I would save me personally with GPT three, the previous version of chat GPT which was released in twenty twenty, it was so much better than and your generative AI existed before, but this was so much better than anything we had seen before that you know that I and many others were, you know, looking at you know, how can, what can?
What does this mean?
Basically, the conversations that started in November with everybody else really started back in twenty twenty, twenty twenty one with GPT three. For those of us in the AI world.
Sarah Hoffmann me thank you for audio advice and was back to them. Vice president of AI and Machine Learning Research every Fidelity Investments, there is quite the whirlwind. Immediate departures today from Tucker Carlson departing Fox News immediately sending Fox shares plunging, as we've already seen in the showdown six hundred million dollars in terms of market cap.
We've also seen CNN star anchor Don Lemon.
Leaving after being under intense scrutiny following remarks all went back in February about women and aging. Let's break all of this down. I Meg's Felix Chillette extraordinary. Let's start with Tucker Carlson. How much is this linked to settlements with voting systems in the life.
I think it's definitely fallout from the dominion settlement. Rupert Murdoch in the past has shown that during times of controversy he's totally willing to get rid of talent. And if you think back to the phone hacking scandal, closing News of the World, getting rid of writers reporters left and right, I think you know Murdoch has always felt confident that he can replace the talent, even if it's someone like Tucker Carlson, who's currently the top rated primetime
host for Fox News. You think back of when Fox News got rid of Glenn Beck reread events, Meg and Kelly, they're always this question, Oh, how are they going to recover? And yet whoever they plug into those time slots always seem to do quite well.
Felix, our colleagues at Bloomberg Intelligence have a react out at pointing out Fox News two point two billion dollars of EBIT DARR or seventy percent of profits. You can see why there's that market reaction. CNN Don Lemon, what do we know?
Don Lemon has been, you know, going from one controversy to the next for the last couple of months. They brought him back after he made these comments about Nicki Haley that upset people. You know, the problem with Don Lemon is not only is the generating negative headlines for CNN, but also the ratings have been lousy. So combine those two things. Chris Lick, who's overseeing CNN now for Warner
Brothers Discovery, has been under a lot of pressure. You know, ratings have been way down ever since Donald Trump left office for CNN, and so the fact that they would make this switch, it almost seems surprising to me that they haven't done this previously.
Felix Jalet with the inside track and what is a whirlwinder headlines we'll let him get back to his analysis of reporting.
We thank you so much.
Meanwhile, Oh, quite an extraordinary start to a Monday, and Ed, I thank you for rolling with my rather horse voice. I wasn't at partying, I'm afraid to say.
But that does it for this edition of Bloomberg Technology.
Tune in tomorrow for our gear up the coverage, your coverage of RSA cybersecurity conference over in San Francisco.
We got the eighteen t COO among many more.
Yeah. Look, huge weeks of earnings, just megacap names coming left, right and center. If you want to recap, don't forget. We have the podcast on Bloomberg or other platforms where you get your podcasts. So much to think on. This is Bloomberg